Studies on palmitic acid incorporation into bovine rhodopsin were extended to include the development of a cell-free soluble enzyme-substrate assay system and the demonstration that palmitoyl coenzyme A was the donor molecule in the transfer reaction. Both in vivo and in vitro experiments with rat retinas resulted in the incorporation of labeled palmitic acid into rat rhodopsin. The palmitic acid appears to be associated with newly synthesized rhodopsin but its incorporation is a relatively late post-translational event that could be related to vectorial intracellular transport. Palmitic acid also labels phospholipids, primarily phosphatidyl choline. Arachidonic acid labels phospholipids in the descending order of phosphatidyl choline, phosphatidyl inositol and phosphatidyl ethanolamine.